US consumer spending dips in September

The gains in consumer spending, which accounts for two-thirds of US economic activity, have averaged 0.2 percent over the past three months.

The pace of spending slowed from a 0.3 percent rise in August, but was in line with analyst estimates.

But personal incomes rose for a second straight month by 0.5 percent, well above the average estimate of 0.2 percent.

Inflation remained tame amid slack demand in the lackluster economy recovering from the severe 2008-2009 recession.

The price index for personal consumption expenditures rose 0.1 percent in September, half the pace in August. Excluding food and energy, the so-called “core” PCE price index, rose 0.1 percent for the second month in a row.

On an annual basis, overall consumer prices were up 0.9 percent and core prices gained 1.2 percent, well below the Federal Reserve’s two percent target for price stability.

“Inflation remains low enough to be a concern for at least some at the Federal Reserve,” said Scott Hoyt at Moody’s Analytics.